Most new fashion companies, like startups in any field, are destined to fail. On Friday, ten young designers, at the invitation of the Council of Fashion Designers of America, pitched their companies to a panel of four prominent investors in a hotel across from Bryant Park, seeking lessons on how to avoid that fate.
A cobbler named Isa Tapia, who wanted capital to help keep up with demand for her pretty shoes, said, “I’ve lost some orders because I’ve had to say no to stores.” Kaelen Haworth, a clothing designer, said, “We want to implement what we’re calling a double-double strategy—to double doors and sales for each year going forward.” (“Doors” refers to the stores where the collection, called Kaelen, is sold.) Others had more swagger. Some designers projected that their sales would increase tenfold in the next five years; others predicted twentyfold growth. “I had an order from Barneys before I even knew I wanted to be a designer,” Yara Flinn, the proprietor of a five-year-old women’s line called Nomia, claimed in her presentation.
The panel of judges sometimes seemed as though they belonged on an episode of “American Idol,” which was surely part of the plan. “If I could bottle that!” Lawrence Lenihan, a venture capitalist, said after Flinn’s performance. But they also had some questions: What’s your e-commerce strategy? Who are your competitors? “Is there not a scalable way to tell the customer your story?” Lenihan asked a jewelry designer who travels across the country to make personal appearances at the stores that carry her line. “Otherwise, you’re going to be living out of a bag for the next five years.”
While it was unlikely that any of the contestants would leave the pitch event with a check—the winner would be awarded tickets to the C.F.D.A.’s annual awards gala rather than an actual investment—the designers hoped to get a better sense of what investors want to hear. The event, a first for the C.F.D.A., comes during a boom in fashion I.P.O.s. Luxury brands—which were once happy to stay privately owned, sometimes for decades—are trying to replicate the success of the designer Michael Kors, who took his namesake company public in 2011. Meanwhile, investors and fashion conglomerates are investing in startup fashion firms, hoping to sell or get in on an I.P.O. exit a couple of years later, or, at the very least, to reap some of the other benefits of having a stake in a fast-growing startup. In the past year, L.V.M.H.—whose fashion-group C.E.O., Pierre-Yves Roussel, was one of the event’s judges—has invested in several new brands, including J. W. Anderson, Nicholas Kirkwood, and Marco de Vincenzo.
In deliberation, the panel was split. Half the judges were focussed on a nine-month-old handbag line called Kara, described by its founder as being designed for “anti-it girls.” Kara seemed to know how to cater to the Millennial generation, some of the panelists felt. The other half enthused about Orley, a line of Italian-made men’s knitwear and suits. The company was founded by two brothers, Matthew and Alex Orley, along with Matthew’s fiancée, Samantha Florence, and the clothes look like they were pulled right from Wes Anderson’s closet. Orley wasn’t as financially successful as some of the other designers, but the judges liked the look of the clothes and the fact that much of the collection was produced in high-end factories in Italy. “I can see them opening a store tomorrow and it being credible,” Roussel said.
“There were ten companies that presented that I would consider writing a check to,” Lenihan said, before the panel announced a winner, easing the inevitable flush of disappointment for the nine others. “But, before you mob me, let me issue one challenge. Not one of you had a transformative business model. How do you do something absolutely unique? Then I think you really have something.” Still, a winner had to be chosen; Orley emerged victorious. Alex Orley seemed to be hoping to parlay the recognition into a real investment. “I just talked to Lawrence,” he told me, as the event ended. “Hopefully we can meet him some other time, outside of this.”
Lauren Sherman has written about the fashion business for the New York Times, the Wall Street Journal, Forbes, Business of Fashion, Fashionista, and others.
Photograph by Darío Calmese.
